States must take part in redress: Fox

The former police inspector who alleged church and police cover-ups of pedophile priests in NSW's Hunter Valley has warned the federal government's abuse redress scheme won't work if states can opt-out.

The government announced on Friday survivors of institutional child abuse will be able to get up to $150,000 as part of a national redress scheme starting in 2018 and running for at least 10 years.

But acting on legal advice, the government said it would have to operate on an opt-in basis and the state governments could not be compelled to take part.

South Australia immediately rejected the idea, while the other states - many of which have well-advanced work on their own schemes - are considering their positions.

Peter Fox says the scheme will not work if it's not national.

"That's something that the government is going to have to take on board and perhaps take back to the table," he told ABC radio on Saturday.

There should also be a provision to lift the $150,000 cap for extreme cases, he said.

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Mr Fox said many would be grateful for the great progress made in recent years, but there's still work to do.

"How did this amount of crime go so undetected by all of our law enforcement agencies for so long?

"How did our law enforcement fail?"

Lawyers for abuse victims say the federal government must show leadership in getting the states, territories and churches to opt-in to a redress scheme.

Lawyer Michelle James, from Maurice Blackburn, said it would only work with genuine commitment from the states and by ensuring the institutions did not hide behind the scheme to avoid meeting their obligations to abuse survivors.

The Catholic and Anglican churches, which have been the subject of much evidence heard by the child abuse royal commission, have welcomed the scheme.